Over the past couple of weeks, TICK has signaled potential rotation between stocks and sectors. In addition, new highs have remained above the zero
New Highs and New Lows
As new highs outperform, histogram remains above the zero
Consider the above graphic for a moment.
Many traders are thinking, as well as yours truly, that the S&P 500 is nearing a double top, showing potential for a pullback. Junk and High Yield Corporate Debt, small caps (IWM) and biotechs are weakening. Therefore, we anticipate a double top would be the likely outcome, if not for rotation.
Sector Rotation and Stocks
Considering the above brief analysis, there is another possibility we need to consider. Rotation is apparent. We’ll focus on these sectors.
Industrials, transports, communications and media, financials, technology and consumer discretionary are strong, showing signs of rotation. Trade these sectors if you’re looking for new p
Healthcare, biotech, utilities
Strength in banks is very apparent, and not only in the U.S.
Bank of Montreal (BMO) and Royal Bank of Canada (RY) are strong. The latter broke above resistance on Wednesday. Relative strength lines are climbing for both stocks. Therefore, BMO will most likely breakout this morning and follow RY.
Join us today in the trading room for our LIVESTREAM broadcast during market hours, as we trade banks and other new positions in strong sectors. Watch, listen and trade from 9:20 AM to 4:15 PM Monday through Friday.
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Futures are mildly green, after weak manufacturing data out of Europe.
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*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.
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